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November 2, 2017, Trial News

Kate Halloran

The Ninth Circuit has affirmed a jury verdict in favor of three California police officers who alleged racial discrimination and retaliation against their department and police chiefs. For the first time, the court considered whether California law prohibits public employees from bringing §1981 claims and found that it does not. The court then upheld the verdict holding some of the police chiefs personally liable and assessing punitive damages for their malicious conduct against the officers.

The Ninth Circuit has affirmed a jury verdict in favor of three California police officers who alleged racial discrimination and retaliation against their department and police chiefs. For the first time, the court considered whether California law prohibits public employees from bringing §1981 claims and found that it does not. The court then upheld the verdict holding some of the police chiefs personally liable and assessing punitive damages for their malicious conduct against the officers. (Flores v. City of Westminster, 2017 WL 4532462 (9th Cir. Oct. 11, 2017).)

Three police officers of Latino descent alleged that their police department and four individual former and current police chiefs discriminated against them on the basis of race in violation of §1981 and the California Fair Employment and Housing Act (FEHA). One of the officers, Jose Flores, served the city for 10 years and had applied for special assignments and for a detective position to advance his career but, he argued, the positions were given to less-experienced officers. Flores also alleged that fellow officers called him racially derogatory names and that he became the target of retaliatory actions after he filed a discrimination complaint with the California Department of Fair Employment and Housing.

Flores had never been disciplined before filing his complaint. After filing the complaint, Flores claimed that he was removed from assignments, received a written reprimand for failing to respond to a call even though three other officer units had been dispatched, and was entangled in an internal affairs investigation for allegedly failing to report others’ misconduct, among other retaliatory acts. The other officers, Ryan Reyes and Brian Perez, alleged similar claims after being overlooked for special assignments in favor of less-qualified white officers.

A jury found that the city had retaliated against Flores, that two of the police chiefs discriminated against all three officers, and that three of the police chiefs had retaliated against the officers in violation of §1981. The jury awarded $3.3 million in damages, including punitive damages, some of which exceeded $300,000. The city and police chiefs appealed, arguing that the plaintiffs had not presented sufficient evidence of their claims and that §1981 protections are not available to public employees in California.

The Ninth Circuit first considered whether Flores failed to establish his FEHA retaliation claim. To prove a FEHA violation, Flores had to show that the city took adverse employment actions against him that were substantially motivated by his discrimination complaint. Under California law, adverse employment actions include anything that “materially affects the terms, conditions, or privileges of employment.” The court noted that this is not limited to financial or tangible injuries but also includes “a discriminatorily abusive work environment” that negatively affects an employee’s performance or career track—and retaliatory acts can be considered together when evaluating whether adverse employment action occurred.

The court concluded that the evidence presented to the jury was sufficient to conclude that adverse employment actions were taken against Flores because the types of discipline that he had received became part of his file and such actions had been considered against the records of other officers who had also applied for special assignments. The court further found that to establish retaliation, Flores only had to show a link between the adverse actions and his complaint—and that this could be demonstrated through circumstantial evidence. The court explained that “producing evidence of nothing more than the [City]’s knowledge that [he] engaged in protected activities and the proximity in time between the protected action and the allegedly retaliatory employment decision” was adequate—here, that the city knew about his discrimination complaint and that the retaliatory actions started five months later. The court disagreed with the city that this timeframe was too long after the complaint to indicate a link—noting that three to eight months was considered temporally proximate in other cases—and the city failed to offer a legitimate reason for the employment actions it took.

The city also requested a new trial on damages, which the court denied. The city claimed that Flores received a “double recovery” because the jury awarded compensatory damages against the city for the FEHA claim and against the police chiefs for the §1981 claim. The court found that it was reasonable based on the evidence that the damages awarded for the FEHA claim were directed at the actions of officers in the department other than the police chiefs.

As to the §1981 claims against the police chiefs, the court disagreed that California law bars state employees from recovering under the federal law. Relying on Judie v. Hamilton (872 F.2d 919 (9th Cir. 1989)), which interpreted Washington law but set forth a three-step test for evaluating this question, the court first considered whether a federal statute addresses the issue. Since it does not, the court next looked to how state common law would apply and whether that state law is consistent with federal law and the U.S. Constitution.

The defendant police chiefs argued that §1981 applies only to contractual employment arrangements, not statutory ones as is the case for public employees in California. Applying the three-part test to California law for the first time, the Ninth Circuit found that because of 1991 amendments to §1981 that expanded what the federal law considered contractual, this limitation did not apply. It also noted that a 2003 California Supreme Court case, White v. Davis (30 Cal. 4th 528), interpreted §1981's contract language more broadly. Finally, on the third part of the test regarding the federal interest at stake, the court determined that interpreting California law to prevent public employees from bringing §1981 claims “would be inconsistent with the Constitution and the laws of the United States” to prohibit racial discrimination in employment.

The defendant police chiefs also disputed the verdict holding them individually liable and assessing punitive damages. They argued that the plaintiffs had not presented evidence of malicious conduct. The Ninth Circuit explained that the chiefs could be individually liable for depriving plaintiffs of their constitutional rights, for culpable actions or inactions involving their subordinates, for allowing deprivation of constitutional rights, or for reckless or callous indifference to those rights. The court found that the jurors heard evidence of behavior that they could reasonably interpret as malicious conduct and that punitive damages were therefore appropriate.

The court also refused to reduce the punitive damages award as “unconstitutionally excessive,” explaining that the U.S. Supreme Court has repeatedly refused to assess punitive damages through a “mathematical formula.” The police chiefs had argued that the award exceeded a 4:1 ratio of punitive damages to compensatory damages. The court characterized intentional discrimination as particularly insidious. Because of this, a larger punitive damages award in such cases may be appropriate. Finally, the court explained that there is no cap on §1981 damages and that only a few of the individual punitive damages awards exceed Title VII’s $300,000 cap on civil penalties.